Sigyn Therapeutics Inc.
04/15/2025 | Press release | Distributed by Public on 04/15/2025 11:43
Annual Report for Fiscal Year Ending December 31, 2024 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this filing. This discussion and other parts of this filing contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations, intentions, and beliefs. Our actual results may differ materially from those discussed in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and in other parts of this filing, and you should not place undue certain on these forward-looking statements, which apply only as of the date of this filing. See "Disclosure Regarding Forward-Looking Statements".
We are an emerging growth company as defined in Section 2(a) (19) of the Securities Act. Pursuant to Section 107 of the Jumpstart Our Business Startups Act, we may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, meaning that we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have chosen to take advantage of the extended transition period for complying with new or revised accounting standards applicable to public companies to delay adoption of such standards until such standards are made applicable to private companies. Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
OVERVIEW:
Historical Development
Our Company
Sigyn Therapeutics, Inc. ("Sigyn", the "Company", "we," "us," or "our") is a development-stage company focused on creating therapeutic solutions that address unmet needs in global healthcare. Our corporate address is 2468 Historic Decatur Road, Suite 140, San Diego, California, 92106.
Sigyn Therapy™, our lead product candidate, is a broad-spectrum blood purification technology designed to treat pathogen-associated inflammatory disorders that are not addressed with approved drug therapies. Candidate treatment indications include endotoxemia and inflammation in end-stage renal disease (dialysis) patients, sepsis (a leading cause of hospital deaths), community acquired pneumonia (a leading cause of death among infectious diseases), and emerging pandemic threats.
Our development pipeline includes a cancer treatment system comprised of ChemoPrep™ to enhance the tumor site delivery of chemotherapy, and ChemoPure™ to reduce treatment toxicity and inhibit the spread of cancer metastasis.
Reverse Stock Split
Effective January 19, 2024, Board of Directors declared a one-for-forty reverse stock split to shareholders of record on or before January 31, 2024 of the Company's issued and outstanding shares of common stock, outstanding warrants and options, and the Series B Convertible Preferred Stock. The number of shares of common stock and convertible preferred shares obtainable upon exercise or conversion and the exercise prices and conversion rate have been equitably adjusted. As such, all share and per share amounts have been retroactively adjusted to reflect the reverse stock split.
Financing Transactions
Preferred Stock
The Company has 10,000,000 shares of par value $0.0001 preferred stock authorized, of which 2,403 and 1,287 shares preferred shares are issued and outstanding at December, 31, 2024 and 2023, respectively.
On April 10, 2024, Osher elected to exchange $621,000 of Notes for an aggregate of 823.86 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share converts into 125.63 shares of the Company's common stock, subject to antidilution adjustments for any stock splits and recapitalizations, and for issuances of additional shares at an issue price of less than the conversion ratio.
On April 9, 2024, Brio elected to exchange $220,420 of Notes for an aggregate of 292.4 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share converts into 125.63 shares of the Company's common stock, subject to antidilution adjustments for any stock splits and recapitalizations, and for issuances of additional shares at an issue price of less than the conversion ratio.
During fiscal 2023, holders of 161,684 shares of common stock elected to exchange these shares for an aggregate of 1,287 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share converts into 125.53 shares of the Company's common stock, subject to antidilution adjustments for any stock splits and recapitalizations, and for issuances of additional shares at an issue price of less than the conversion ratio in the Warrant Exchange Agreement.
Common Stock
On December 30, 2024, the Company filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation with the State of Delaware, which went effective immediately upon filing. The Certificate of Amendment decreased our authorized common stock to One Hundred Million (100,000,000) shares, par value $0.0001, of which 1,605,377 and 1,288,415 shares are outstanding as of December 31, 2024 and 2023, respectively.
During the year ended December 31, 2024, the holders of $707,730 of Original Issue Discount Senior Convertible Debentures converted their debentures in exchange for the issuance of 157,526 shares of Common Stock to the holders.
During the year ended December 31, 2024, the Company issued 38,325 common shares valued at $214,550 (based on the estimated fair value of the stock on the date of grant), respectively, for services rendered.
During the year ended December 31, 2023, a total of 559,839 warrants were exchanged for 279,920 shares of the Company's common stock.
On June 2, 2023, a third-party investor elected to convert the aggregate principal amount of two Notes of $198,000, into 31,075 common shares.
Shares Cancelled
On January 9, 2024, the Company's CTO agreed to surrender 64,100 common shares held by him and were cancelled by the Company.
Restricted Stock Units
Effective October 10, 2022, the Company's Board of Directors appointed Ms. Richa Nand, Mr. Jim Dorst, and Mr. Chris Wetzel and on January 11, 2025, appointed Mr. Michael Ryan as non-executive members to the Company's Board of Directors ("Director"). Each Director shall receive an annual grant of restricted stock units of $50,000. During the years ended December 31, 2024 and 2023, the Company recorded stock-based compensation totaling $150,000 and $150,000, respectively, in the consolidated Statements of Operations.
Warrants
On August 24, 2024, the Company issued 2,617 warrants valued at $15,703 (based on the fair value of the options using the Black-Scholes option-pricing method on the date of grant), for services rendered.
On October 8, 2024, the Company offered a short-term inducement to the Company's warrant holders in which the Company will issue ¾ of a share of the Company's common stock in exchange for each warrant. In response to this offer, 246,257 warrants were exchanged for 184,700 shares of the Company's common stock. The Company recognized a gain of $63,715 due to the modification of the warrants in October 2024.
On September 5, 2024, the Company entered into 2024 Notes that included warrants at an exercise price of $7.50 resulting in a modification of the warrants valued at $24,770 (based on the Black Scholes options pricing method on the modification date).
In March 2023, the Company offered a short-term inducement to the Company's third party warrant holders in which the Company will issue one share of the Company's common stock in exchange for each two warrants were exchanged for 279,920 shares of the Company's common stock through December 31, 2023. The Company recognized a gain of $352,965 due to the modification of the warrants in the year ended December 31, 2023 as a result of the modification.
Promissory Notes
On November 26, 2024, the Company entered into promissory notes totaling $314,000 aggregate principal amount of promissory notes (total of $157,000 cash was received) due November 26, 2025 based on $1.00 for each $0.50 paid by the noteholders which were issued at a $157,000 original issue discount from the face value of the promissory notes.
Regulation D
On January 9, 2025, the Company initiated a Regulation D offering to sell up to 750,000 Units at a price of $5,000 per unit with each Unit consisting of one (1) $5,500 principal amount convertible debenture (convertible at Four dollars ($4.00) per share) and a Warrant to purchase 1,250 shares of common stock at $6.00 per share. The Debentures have a principal amount equal to 110% of such Purchaser's subscription amount, convertible at $4.00 per share and maturing one (1) year from the date the subscription amount is accepted by the Company. The Warrants for a number of shares equal to the subscription amount divided by the conversion price with an exercise price of $6.00 per share, exercisable upon issuance and will expire five years from issuance. The Debentures will not be redeemable but contain an automatic conversion feature, which will cause all principal and interest due under the Debenture to automatically convert if our common stock is listed for trading on a national securities exchange, such as NASDAQ or the NYSE. As of April 15, 2025, a total of 69 Units were sold to accredited investors at a price of $5,000 per Unit totaling $345,197.
Convertible Notes
Between January 2020 and November 2024, the Company received cash of $4,849,885 through the issuance of 10% Original Issue Discount Senior Convertible Debentures with third party investors. Between June 2023 and September 2024, $3,069,348 in aggregate principal amount of the notes were converted into 371,110 common shares and 1,116.29 shares of Series B Convertible Preferred Stock. Each share of Series B Convertible Preferred Stock converts into 125.63 shares of the Company's common stock, subject to antidilution adjustments for any stock splits and recapitalizations, and for the issuances of additional shares at an issue price of less than the conversion ratio.
The remaining outstanding Notes are as follows:
| Note Holder/Original Issuance Date | Maturity Date | Cash Received |
Outstanding Balance as of December 31, 2024 (1) |
Outstanding Balance as of December 31, 2023 (1) |
||||||||||
| Osher Capital Partners LLC | ||||||||||||||
| January 28, 2020 ("Note 1") | August 31, 2025 | $ | 350,005 | $ | 620,553 | $ | 564,138 | |||||||
| June 22, 2022 ("Note 2") | August 31, 2025 | 75,000 | 103,745 | 94,314 | ||||||||||
| August 31, 2022 ("Note 2") | August 31, 2025 | 100,000 | 135,520 | 123,200 | ||||||||||
| September 20, 2022 ("Note 2") | August 31, 2025 | 100,000 | 135,520 | 123,200 | ||||||||||
| October 20, 2022 ("Note 2") | March 31, 2025 | 100,000 | 127,000 | 110,000 | ||||||||||
| November 14, 2022 ("Note 2") | March 31, 2025 | 50,000 | 64,350 | 55,000 | ||||||||||
| December 22, 2022 ("Note 2") | March 31, 2025 | 100,000 | 125,000 | 110,000 | ||||||||||
| July 18, 2023 ("Note 3") | August 31, 2025 | 60,000 | 72,600 | 66,000 | ||||||||||
| December 7, 2023 ("Note 3") | August 31, 2025 | 40,000 | 48,400 | 44,000 | ||||||||||
| May 13, 2024 ("Note 4") | May 13, 2025 | 35,000 | 40,000 | - | ||||||||||
| August 19, 2024 ("Note 4") | August 19, 2025 | 7,500 | 8,250 | - | ||||||||||
| November 19, 2024 ("Note 4") | November 19, 2025 | 8,000 | 8,800 | - | ||||||||||
| Brio Capital Master Fund, Ltd. | ||||||||||||||
| March 23, 2022 ("Note 2") | August 31, 2025 | 100,000 | 142,960 | 129,964 | ||||||||||
| November 9, 2022 ("Note 2") | August 31, 2025 | 75,000 | 101,640 | 92,400 | ||||||||||
| January 20, 2023 ("Note 3") | March 31, 2025 | 50,000 | 62,500 | 55,000 | ||||||||||
| February 9, 2023 ("Note 3") | March 31, 2025 | 50,000 | 62,500 | 55,000 | ||||||||||
| July 20, 2023 ("Note 3") | August 31, 2025 | 40,000 | 48,400 | 44,000 | ||||||||||
| January 8, 2024 ("Note 4") | January 8, 2025 | 40,000 | 44,000 | - | ||||||||||
| May 13, 2024 ("Note 4") | May 13, 2025 | 35,000 | 40,000 | - | ||||||||||
| August 20, 2024 ("Note 4") | August 20, 2025 | 11,500 | 12,650 | - | ||||||||||
| November 19, 2024 ("Note 4") | November 19, 2025 | 8,000 | 8,800 | - | ||||||||||
| Various third-party noteholders | ||||||||||||||
| Various dates in fiscal 2024 ("Note 4") | None outstanding | 650,890 | 8,800 | - | ||||||||||
| Previous fiscal 2021, 2022, and 2023 Osher and Brio Notes converted in fiscal 2024 | - | 841,420 | ||||||||||||
| Total convertible notes payable | $ | 2,085,895 | $ | 2,021,988 | $ | 2,507,636 | ||||||||
(1) includes amounts for original issue discounts and implied interest for subsequent note extensions at between 10% and 12%.
The outstanding Osher and Brio Notes can convert into a total of 4,092 shares of Series B Convertible Preferred Stock, with each share of Series B Convertible Preferred Stock convertible into 125.63 shares of the Company's common stock, subject to adjustment as provided therein, such as stock splits and stock dividends. In addition, the remaining Notes provide for an automatic conversion into Series B Convertible Preferred Stock in accordance with their terms upon a listing of the Company's common stock on a national securities exchange such as Nasdaq Capital Market.
The Company has not repaid the Brio January 8, 2024 convertible note of $44,000 that matured on January 8, 2025 and the convertible note is now in default. The Company is currently in discussions to restructure the terms of the note.
The Company has not repaid two Brio convertible notes totaling $125,000 that matured on March 31, 2025 and the convertible notes are now in default. The Company is currently in discussions to restructure the terms of these notes.
The Company has not repaid three Osher convertible notes totaling $316,350 that matured on March 31, 2025 and the convertible notes are now in default. The Company is currently in discussions to restructure the terms of these notes.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about us on which to base an evaluation of our performance. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible cost overruns due to increases in the cost of services. To become profitable and competitive, we must receive additional capital. We have no assurance that future financing will materialize. If that financing is not available, we may be unable to continue operations.
Overview of Presentation
The following Management's Discussion and Analysis ("MD&A") or Plan of Operations includes the following sections:
| ● | Results of Operations | |
| ● | Liquidity and Capital Resources | |
| ● | Capital Expenditures | |
| ● | Going Concern | |
| ● |
Off-Balance Sheet Arrangements |
|
| ● |
Critical Accounting Policies |
General and administrative expenses consist primarily of personnel costs and professional fees required to support our operations and growth.
Depending on the extent of our future growth, we may experience significant strain on our management, personnel, and information systems. We will need to implement and improve operational, financial, and management information systems. In addition, we are implementing new information systems that will provide better record-keeping, customer service and billing. However, there can be no assurance that our management resources or information systems will be sufficient to manage any future growth in our business, and the failure to do so could have a material adverse effect on our business, results of operations and financial condition.
Results of Operations
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
The following discussion represents a comparison of our results of operations for the years ended December 31, 2024 and 2023. The results of operations for the periods shown in our audited consolidated financial statements are not necessarily indicative of operating results for the entire period. In the opinion of management, the audited consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state our financial position, results of operations and cash flows for the periods presented.
|
Year Ended 2024 |
Year Ended 2023 |
|||||||
| Net revenues | $ | - | $ | - | ||||
| Cost of sales | - | - | ||||||
| Gross Profit | - | - | ||||||
| Operating expenses | 2,519,242 | 2,455,317 | ||||||
| Other expense | 820,970 | 1,690,619 | ||||||
| Net loss before income taxes | $ | (3,340,212 | ) | $ | (4,145,936 | ) | ||
Net Revenues
For the years ended December 31, 2024 and 2023, we had no revenues.
Cost of Sales
For the years ended December 31, 2024 and 2023, we had no cost of sales.
Operating expenses
Operating expenses increased by $63,925, or 2.6%, to $2,519,242 for the year ended December 31, 2024 from $2,455,317 for the year ended December 31, 2023 primarily due to increases in professional fees of $64,973, investor relations costs of $206,862, offset partially by research and development costs of $24,886, compensation costs of $8,624, insurance costs of $31,808, rent expenses of $573, travel costs of $2,170, stock based compensation of $65,558, consulting costs of $67,739, depreciation costs of $1,145, amortization costs of $2,100, and general and administration costs of $3,307, as a result of administrative infrastructure for our anticipated business development. In 2024 and 2023, the Company incurred stock-based compensation as a result adding members to our board of directors, research and development costs attributed to in house efforts, and increased professional fees, primarily investor relations, for brand awareness.
For the year ended December 31, 2024, we had marketing expenses of $1,130, research and development costs of $773,279, and general and administrative expenses of $1,744,833 primarily due to professional fees of $239,218, compensation costs of $671,984, consulting costs of $136,153, insurance costs of $203,944, stock based compensation of $150,000, rent of $77,732, depreciation costs of $5,611, investor relations costs of $243,390, and general and administration costs of $16,801, as a result of administrative infrastructure for our anticipated business development. In 2024 and 2023, the Company incurred stock-based compensation as a result adding members to our board of directors, research and development costs attributed to in house efforts, and professional fees, primarily investor relations, for brand awareness.
For the year ended December 31, 2023, we had marketing expenses of $392, research and development costs of $798,165, and general and administrative expenses of $1,656,760 primarily due to professional fees of $174,245, compensation costs of $680,608, consulting costs of $203,892, insurance costs of $235,752, stock based compensation of $215,558, rent of $78,305, depreciation costs of $6,756, amortization costs of $2,100, investor relations costs of $36,528, travel costs of $2,170, and general and administration costs of $20,846, as a result of administrative infrastructure for our anticipated business development. In 2023, the Company incurred stock-based compensation as a result adding members to our board of directors, research and development costs attributed to in house efforts, and professional fees, primarily investor relations.
Other Expense
Other expense for the year ended December 31, 2024 totaled $820,970 primarily due interest expense of $856,533 in conjunction with accretion of debt discount and original issuance discount, and interest expense of $3,382, and the gain on modification of warrants of $38,945, compared to other expense of $1,690,619 primarily due interest expense of $2,041,182 in conjunction with accretion of debt discount and original issuance discount, and interest expense of $2,402, and the modification of warrants of $352,965 for the year ended December 31, 2023.
Net loss before income taxes
Net loss before income taxes for the year ended December 31, 2024 totaled $3,340,212 primarily due to increases/decreases in compensation costs, professional fees, consulting costs, research and development costs, investor relations costs, insurance costs, stock based compensation, rent, and general and administration costs compared to a loss of $4,145,936 primarily due to increases/decreases in compensation costs, professional fees, consulting costs, research and development costs, investor relations costs, insurance costs, stock based compensation, rent, and general and administration costs.
Assets and Liabilities
Assets were $213,719 as of December 31, 2024. Assets consisted primarily of cash of $12,144, other current assets of $9,100, equipment of $9,685, operating lease right-of-use assets of $112,079, and other assets of $70,711. Liabilities were $4,671,343 as of December 31, 2024. Liabilities consisted primarily of accounts payable of $608,384, accrued payroll and payroll taxes of $1,868,973, short-term promissory notes of $174,206, net of $139,794 of unamortized debt issuance costs, convertible notes of $1,891,736, net of $130,252 of unamortized debt issuance costs, operating lease liabilities of $126,302, and other current liabilities of $1,742.
Liquidity and Capital Resources
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $14,681,724 at December 31, 2024, had a working capital deficit of $4,593,743 at December 31, 2024, had net losses of $3,340,212 and $4,145,936 for the years ended December 31, 2024 and 2023, respectively, and net cash used in operating activities of $872,436 and $1,383,210 for the years ended December 31, 2024 and 2023, respectively, with no revenue earned since inception, and a lack of operational history. These matters raise substantial doubt about the Company's ability to continue as a going concern.
While the Company is attempting to expand operations and increase revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of a public offering or an asset sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy to generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect or on terms acceptable to the Company. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues.
The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
General - Overall, we had an increase in cash flows for the year ended December 31, 2024 of $454 resulting from cash provided by financing activities of $872,890, offset partially by cash used in operating activities of $872,436.
The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:
|
Year Ended 2024 |
Year Ended 2023 |
|||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | (872,436 | ) | $ | (1,383,210 | ) | ||
| Investing activities | - | - | ||||||
| Financing activities | 872,890 | 1,386,544 | ||||||
| $ | 454 | $ | 3,334 | |||||
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Cash Flows from Operating Activities - For the year ended December 31, 2024, net cash used in operations was $872,436 compared to net cash used in operations of $1,383,210 for the year ended December 31, 2023. Net cash used in operations was primarily due to a net loss of $3,340,212 for year ended December 31, 2024 and the changes in operating assets and liabilities of $1,264,324, primarily due to the increases in other current assets of $47,273, accounts payable of $146,738, and accrued payroll and payroll taxes of $1,077,219, offset primarily by a decrease in other current liabilities of $6,906. In addition, net cash used in operating activities includes adjustments to reconcile net profit from depreciation expense of $5,611, stock issued for services of $214,550, warrants issued for services of $15,703, accretion of original issuance costs of $392,783, the accretion of debt discount of $463,750, stock-based compensation of $150,000, and the gain on modification of warrants of $38,945.
For the year ended December 31, 2023, net cash used in operations was primarily due to a net loss of $4,145,936 and the changes in operating assets and liabilities of $850,095, primarily due to the increases in other current assets of $44,431, accounts payable of $196,629, and accrued payroll and payroll taxes of $699,130, offset primarily by decreases in other current liabilities of $1,233. In addition, net cash used in operating activities includes adjustments to reconcile net profit from depreciation expense of $6,756, amortization expense of $2,100, accretion of original issuance costs of $285,187, the accretion of debt discount of $1,755,995, stock-based compensation of $215,558, and the modification of warrants of $352,965.
Cash Flows from Investing Activities - For the years ended December 31, 2024 and 2023, the Company had no cash flows from investing activities.
Cash Flows from Financing Activities - For the year ended December 31, 2024, net cash provided by financing was $872,890 due to proceeds from short term convertible notes of $795,890, proceeds from short term promissory notes of $157,000, advance from shareholder of $35,000, partially offset by repayments of advance from shareholder of $115,000. For the year ended December 31, 2023, net cash provided by financing was $1,386,544 due to proceeds from short term convertible notes of $1,312,000 net of fees associated with the filing of the Company's Form S-1 of $5,456 and advance from shareholder of $80,000.
Financing - We expect that our current working capital position, together with our expected future cash flows from operations will be insufficient to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements and other contractual obligations for at least the next twelve months. However, this belief is based upon many assumptions and is subject to numerous risks, and there can be no assurance that we will not require additional funding in the future.
We have no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or technologies or any other material capital expenditures. However, we will continue to evaluate acquisitions of and/or investments in products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions and/or investments. We may not be able to obtain such financing on commercially reasonable terms, if at all. Due to the ongoing global economic crisis, we believe it may be difficult to obtain additional financing if needed. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our shareholders, in the case of equity financing.
Regulation D
On January 9, 2025, the Company initiated a Regulation D offering to sell up to 750,000 Units at a price of $5,000 per unit with each Unit consisting of one (1) $5,500 principal amount convertible debenture (convertible at Four dollars ($4.00) per share) and a Warrant to purchase 1,250 shares of common stock at $6.00 per share. The Debentures have a principal amount equal to 110% of such Purchaser's subscription amount, convertible at $4.00 per share and maturing one (1) year from the date the subscription amount is accepted by the Company. The Warrants for a number of shares equal to the subscription amount divided by the conversion price with an exercise price of $6.00 per share, exercisable upon issuance and will expire five years from issuance. The Debentures will not be redeemable but contain an automatic conversion feature, which will cause all principal and interest due under the Debenture to automatically convert if our common stock is listed for trading on a national securities exchange, such as NASDAQ or the NYSE. As of April 15, 2025, a total of 69 Units were sold to accredited investors at a price of $5,000 per Unit totaling $345,197.
Advance from Shareholder
The Company borrows funds from the Company's CEO for working capital purposes from time to time. The Company has recorded the principal balance due of $0 and $80,000 under Advance From Shareholder in the accompanying Balance Sheets at December 31, 2024 and 2023, respectively. The Company received advances of $35,000 and $80,000 and had repayments of $115,000 and $0 for the years ended December 31, 2024 and 2023, respectively. The advance from our CEO was not made pursuant to any loan agreements or promissory notes, is non-interest bearing and due on demand.
Convertible Notes Payable
During fiscal 2024, the Company entered into Original Issue Discount Senior Convertible Debentures (the "2024 Notes") totaling (i) $852,630 aggregate principal amount of Notes (total of $771,891 cash was received) due between January and June 2025 based on $1.00 for each $0.90909 paid by the noteholders and (ii) five-year Common Stock Purchase Warrants ("Warrants") to purchase up to an aggregate of 213,164 shares of the Company's Common Stock at an exercise price of $7.50 per share. The aggregate cash subscription amount received by the Company for the issuance of the Note and Warrants was $771,891 which was issued at a $80,738 original issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $4.00 per share, subject to adjustment as provided therein, such as stock splits and stock dividends.
In September 2024, holders converted $474,793 in exchange for the issuance of 118,700 shares of Common Stock to the holders.
In May and June 2024, holders converted $232,937 in exchange for the issuance of 38,826 shares of Common Stock to the holders.
On April 10, 2024, Osher elected to exchange $621,000 of Notes for an aggregate of 823.86 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share converts into 125.63 shares of the Company's common stock, subject to antidilution adjustments for any stock splits and recapitalizations, and for issuances of additional shares at an issue price of less than the conversion ratio.
On April 9, 2024, Brio elected to exchange $220,420 of Notes for an aggregate of 292.4 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share converts into 125.63 shares of the Company's common stock, subject to antidilution adjustments for any stock splits and recapitalizations, and for issuances of additional shares at an issue price of less than the conversion ratio.
In October 2023, the holders of $997,700 of Original Issue Discount Senior Convertible Debentures converted their debentures at a contractual exercise price of $10.00 per share in exchange for the issuance of 166,284 shares of Common Stock to the holders.
Capital Expenditures
We expect to purchase approximately $30,000 of equipment in connection with the expansion of our business during the next twelve months.
Fiscal Year-End
Our fiscal year end is December 31.
Future Contractual Obligations and Commitments
Refer to Note 3 in the accompanying notes to the consolidated financial statements for future contractual obligations and commitments. Future contractual obligations and commitments are based on the terms of the relevant agreements and appropriate classification of items under GAAP as currently in effect. Future events could cause actual payments to differ from these amounts.
We incur contractual obligations and financial commitments in the normal course of our operations and financing activities. Contractual obligations include future cash payments required under existing contracts, such as debt and lease agreements. These obligations may result from both general financing activities and from commercial arrangements that are directly supported by related operating activities. Details on these obligations are set forth below.
On May 27, 2021, the Company entered into a sixty-three month lease for its corporate office at $5,955 per month commencing June 15, 2021 maturing September 30, 2026.
Off-Balance Sheet Arrangements
As of December 31, 2024, we have not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated under which it has:
| ● | a retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit; | |
| ● | liquidity or market risk support to such entity for such assets; | |
| ● | an obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument; or | |
| ● | an obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material to us, where such entity provides financing, liquidity, market risk or credit risk support to or engages in leasing, hedging, or research and development services with us. |
Inflation
We do not believe that inflation has had a material effect on our results of operations.
Critical Accounting Policies
The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the Company's financial condition and results of operations and which require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the critical accounting policies and judgments addressed below.
The following are deemed to be the most critical accounting policies affecting the Company.
Use of Estimates
The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others: allocation of payroll expense to research and development and warrant valuation. The Company calculates the fair value of warrants using the Black-Scholes option-pricing method. The Black-Scholes option-pricing method requires the use of subjective assumptions, including stock price volatility, the expected life of stock options, risk free interest rate and the fair value of the underlying common stock on the date of grant. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.
Sigyn Therapeutics Inc. published this content on April 15, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on April 15, 2025 at 17:43 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]